On January 1, 2017 Kepler Corporation, issued $5,000,000 of 10-year, 8% convertible debentures at 102. Interest...
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On January 1, 2017 Kepler Corporation, issued $5,000,000 of 10-year, 8% convertible debentures at 102. Interest is to be paid semiannually on June 30 and December 31. Each $1 000 debenture can be converted into five shares of Derrick Corporation $100 par value common stock after December 31, 2018 On January 1, 2019, $500,000 of debenture are converted into common stock, which is then selling at $120. An additional $500,000 of debenture are converted on March 31, 2019 The market price of the common stock is then $110. Accued interest at March 31 will be paid on the next interest date Bond premium is amortized on a straight-line basis. The January 1, 2019 journal entry will have a debit to the Premium on Bonds payable account and a credit to Common Stock account respectively for the amount of $258.000 and $8,000 $8.000 and $250,000 $8.000 and $500,000 $500,000 and $250,000 Od On January 1, 2017 Kepler Corporation, issued $5,000,000 of 10-year, 8% convertible debentures at 102. Interest is to be paid semiannually on June 30 and December 31. Each $1 000 debenture can be converted into five shares of Derrick Corporation $100 par value common stock after December 31, 2018 On January 1, 2019, $500,000 of debenture are converted into common stock, which is then selling at $120. An additional $500,000 of debenture are converted on March 31, 2019 The market price of the common stock is then $110. Accued interest at March 31 will be paid on the next interest date Bond premium is amortized on a straight-line basis. The January 1, 2019 journal entry will have a debit to the Premium on Bonds payable account and a credit to Common Stock account respectively for the amount of $258.000 and $8,000 $8.000 and $250,000 $8.000 and $500,000 $500,000 and $250,000 Od
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Option B will be correct ie 8000 and 250000 Step 1 Calculation of total premium amount received at t... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0132162302
1st edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Posted Date:
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